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Critical skills needed for finance to cut through complexity

The roles of finance professionals are expanding at a fast pace in a constantly changing global economic environment, new research by the American Institute of CPAs shows, creating an urgent need for accounting and finance professionals to grow their skills.

An overwhelming majority (85%) of US CPAs who participated in a recent survey said the role of the CFO and the finance function has expanded moderately or significantly in their organisation. And 94% predict that the level of complexity in business will increase over the next three years.

“We have huge uncertainties in the marketplace,” said Mick Armstrong, CPA, CGMA, the CFO of Micro 100 Tool Corp. in Meridian, Idaho. “Whether you’re looking at health care, whether you’re looking at expected increases in regulation from the government – all of those change the risk environment, and it’s very difficult for businesses, be they private or public, to assess, how am I going to deal with this?”

One thing is certain. Businesses are turning to the finance function to help deal with these changes and complexity. This puts finance professionals in an enviable position of influence. But increased skills are needed to meet additional responsibilities.

More than half of the more than 1,234 qualified respondents to the survey said that, in addition to traditional financial accounting and reporting, they are focused on the following areas:

Risk management, including internal controls (67%).

Strategic business planning (58%).

Accounting information systems, including IT development and cybersecurity (55%).

In addition, nearly half of respondents are focused on management and corporate governance (46%), and another 44% are focused on legal and compliance.

The skills rated most important for performing finance roles in the next one to three years are strategic business planning (69%), risk management and internal controls (52%), and management reporting and analysis (50%).

Communication skills

Communication is a key skill for finance professionals as they take on more responsibilities.

“It’s important to be able to try to not speak over people’s heads,” said Marc Valentin, CPA, CGMA, vice president of finance for MISCOR Group, an Ohio-based industrial services and rail services manufacturer. “It’s speaking at the same level. You know, when in Rome, be a Roman. I try not to use all my technical jargon when I’m talking to other people. I try to break it down into laymen’s terms.”

Bob Gaby, CPA/CITP, CGMA, a founder and principal at California-based management and technology consulting firm Arxis Technology, said three skills are essential for finance professionals today:

Communication. “Whether you’re working with someone that is transactionally oriented, someone that’s just part of the team in a company, or working with a C-level or a VP, you’ve got to be able to communicate at all levels,” he said.

Domain expertise. “We can’t be all things to all people anymore,” he said. “… As finance professionals, we need to identify where we’re strong, where our domain expertise is, and really focus in that area.”

Building relationships. “Business doesn’t come the way it did in the past, via direct marketing, advertisement, et cetera,” he said. “It’s really about building those relationships and nurturing those relationships and keeping a real good focus on the relationship over time.”

Driving performance

The survey showed that at least some finance professionals need skills that even extend beyond the planning, reporting, and analytical functions that their roles have evolved to require. In some cases, finance also is involved with driving performance.

More than one-third of respondents (34%) said driving performance will be an essential skill in finance roles in the next one to three years.

Learning the business. “I work very closely with my COO and my project managers,” said Elizabeth Nilsen, CPA, CGMA, the CFO of FKP Architects in Houston. “And I’m constantly revising the kind of financial information that I’m tracking and that I’m presenting to them to answer the questions that they have about their world and about the projects that they’re working on. We have that responsibility.”

Identifying the key drivers. To give employees incentives, Armstrong said, Micro 100 recently updated and expanded its measurable steps and corresponding standards for various business processes. “There’s a whole variety of things that affect how efficient the operator is on the floor,” he said. “We have to give a way to generate feedback so that we have an opportunity to constantly maintain or improve our efficiency.”

Examining opportunities for improvements. Valentin said automation is going to play an increased role in manufacturing processes. Finance has a key role in these process changes. “I think it’s important for the finance people to get out on the floor to be able to understand how that process goes, because I think that makes that whole process of justification easier, as well as costing in the future,” he said.

CFOs say that by developing the right skills, finance professionals can drive their organisations to conquer the growing complexity and deliver growth.

“We don’t just do numbers,” said Ralph Bender, CPA, CGMA, the CFO of Manship Media in Louisiana. “We do people. We do strategy. We’re looking at: What are the smart ways to grow the business? What are the opportunity costs that we miss if we don’t do something?”

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